Morgan Stanley: Credit spending more clever

The amount of money being spent on credit cards from January to March this year will increase, according to Morgan Stanley.

Britons will spend an average of £1,228 on plastic in the first three months on the year, compared to £730 in 2006, the body states.

However, credit cards are now being used more for household spending and groceries, accounting for 59 per cent of transactions - with traditionally larger purchases such as holidays following behind, the group reported.

The global finance firm believes the increase is due to consumers becoming "increasingly clever" in managing their debt.

"The results of our research show an increased confidence in the use of credit cards as a financial aid. It is encouraging to see that people are using their credit cards sensibly, with credit card spending and repayment figures increasing in tandem," said Patrick Muir, Morgan Stanley marketing director.

In November 2006, consumer money charity Credit Action claimed the amount of personal debt in the UK is increasing by £1 million every four minutes.

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